Sunshine Heart Announces Conditional Approval of IDE From the FDA for C-Pulse(R) Heart Assist System

Sunshine Heart, Inc. (NASDAQ: SSH) (ASX: SHC), a global medical device company focused on innovative technologies for moderate to severe heart failure, today announced that it has received conditional approval from the FDA for an Investigational Device Exemption (IDE) for its flagship C-Pulse® Heart Assist System.

"We are thrilled to receive conditional approval from the FDA to move forward into a pivotal trial for C-Pulse," said Dave Rosa, CEO of Sunshine Heart. "Today's announcement represents another significant milestone for the Company, as well as for the C-Pulse System. I am especially pleased that we were able to receive this approval on our initial submission. The Company has achieved its regulatory and clinical objectives by receiving both the CE Mark and U.S. IDE approval this year. These timely approvals continue to support the Company's market guidance and timelines."

With the receipt of conditional approval of the IDE, Sunshine Heart plans to initiate a pivotal trial in North America in the fourth quarter of 2012. The trial design will consist of 388-patients of which half will be implanted with the C-Pulse System. The other half will be randomized to optimal medical therapy across 30-40 clinical sites. Sunshine Heart expects to receive revenues from trial sites for device implants as the FDA has granted CMS Category B3 status. Because of this designation, it is also anticipated that participating trial centers will be reimbursed by CMS and most private insurance providers. The trial will utilize the Company's next-generation C-Pulse driver, which received approval for clinical trial use from the FDA in August, 2012, and has been in use in Canadian patients currently on the device. The new driver features a single unit, which is lighter, quieter, approximately half the size of its predecessor, and also includes numerous software updates.

The Company estimates enrollment for the event-driven trial will take approximately 2.5 years. The primary endpoint of the trial will be reduction in worsening heart failure events leading to hospitalization, advanced heart failure therapies and heart failure related mortality. A one year safety follow-up is expected. The lead investigator for the trial will be Dr. William T. Abraham, Director of the Division of Cardiovascular Medicine at The Ohio State University Medical Center.

"Having led the C-Pulse feasibility study last year and witnessed the potential impact the device had in patients suffering from heart failure, I am excited to return to play an integral role in C-Pulse's final stages of development," said Dr. Abraham. "With a large and growing population of C-Pulse eligible patients and hospitals facing financial penalties for high heart failure re-hospitalization rates beginning in 2013 under the Obama Health Reform Act, the C-Pulse pivotal trial will determine if it will be beneficial to both patients and hospitals alike to improve health outcomes."

In July, Sunshine Heart announced positive 12-month extended follow up data from its preliminary feasibility study. Extended data included further positive efficacy trends with continued improvements in NYHA Class reduction, MLWHF Quality of Life score, and six minute hall walk. There were no additional patients with device-related serious adverse events (SAEs) in this 12 month time frame. Dr. Abraham will be presenting 12 month results at the October 2012 TCT meeting in Miami, Florida. Also in July, the Company achieved CE Mark certification, allowing commercialization of the device in Europe. The Company has been targeting leading LVAD and transplant centers in the EU. Specific initial focus for the device has been within Germany and Italy, two countries that when combined, are believed to have the highest number of hospital bed days per year for heart failure in Europe.

About the C-Pulse® Heart Assist System The C-Pulse Heart Assist System, or C-Pulse System, an investigational device in the United States, Canada and countries that do not recognize the CE mark approval, utilizes the scientific principles of intra-aortic balloon counter-pulsation applied in an extra-aortic approach to assist the left ventricle by reducing the workload required to pump blood throughout the body, while increasing blood flow to the coronary arteries. Operating outside the patient's bloodstream, the extra-aortic approach of the C-Pulse technology offers greater flexibility, allowing patients to safely disconnect to have intervals of freedom to perform certain activities such as showering. The C-Pulse System may help maintain the patient's current condition and, in some cases, reverse the heart failure process, thereby potentially preventing the need for later stage heart failure therapies, such as left ventricular assist devices (LVADs), artificial hearts or transplants.

Caution: Investigational device, limited by Federal (or United States) Law to Investigational use.

About Sunshine® Heart
Sunshine Heart, Inc. (NASDAQ: SSH) (ASX: SHC) is an early-stage global medical device company committed to the commercialization of the C-Pulse Heart Assist System, an implantable, non-blood contacting, heart assist therapy for the treatment of moderate to severe
heart failure. The C-Pulse System can be implanted using a minimally invasive procedure and is designed to relieve the symptoms of heart failure through the use of counter-pulsation technology, which enables an increase in cardiac output, an increase in coronary blood flow and a reduction in the heart's pumping load. Sunshine Heart has completed an approved U.S. Food and Drug Administration (FDA) feasibility clinical trial of the C-Pulse System and presented the results in November 2011. In March, 2012, the FDA notified the company that it could move forward with an investigational device exemption (IDE) application. Sunshine Heart received conditional approval from the FDA in September 2012 to initiate its pivotal trial. In July 2012 Sunshine Heart received CE Mark for our C-Pulse System in Europe. Sunshine Heart is a Delaware corporation headquartered in Minneapolis with a subsidiary presence in Australia. The company has been listed on the ASX since September 2004 and on the NASDAQ since February 2012. For more information, please visit www.sunshineheart.com.

Forward-Looking Statements Certain statements in this report are forward-looking statements that are based on management's beliefs, assumptions and expectations and information currently available to management. All statements that address future operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements, including without limitation, our expectations with respect to product development, commercialization efforts, future clinical trial activities and results, regulatory acceptance of our filings, ultimate clinical outcomes and benefits of our products to patients, markets and physician acceptance of the products. These forward-looking statements are subject to numerous risks and uncertainties, including without limitation, the possibility that our clinical trials do not meet their end-points or otherwise fail, that regulatory authorities do not accept our application or approve the marketing of the C-Pulse Heart System, the possibility we may be unable to raise the funds necessary for the development and commercialization of our products, that we may not be able to commercialize our products successfully in the EU and the other risk factors described under the caption "Risk Factors" and elsewhere in our filings with the U.S. Securities and Exchange Commission (SEC) and ASX. You should not place undue reliance on forward-looking statements because they speak only as of the date when made and may turn out to be inaccurate. We do not assume any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We may not actually achieve the plans, projections or expectations disclosed in forward-looking statements, and actual results, developments or events could differ materially from those disclosed in the forward-looking statements.